German Automakers Bend To Trump's Will By Offering To Drop Tariffs

It was an outcome Germany’s automakers could not accept for obvious financial reasons: losing out on the highly profitable US market because of a newly imposed import tax. In light of President Trump’s announcement to impose tariffs on European Union-made products, including vehicles, automakers Volkswagen, BMW and Mercedes-Benz have said they’d be willing to drop all tariffs with the US, according to Automotive News Europe and The Wall Street Journal.

Sources with inside knowledge of the situation claim “German automakers will support the EU’s 10 percent tax on auto imports from the US and a 2.5 percent duty on auto imports going away if Trump backs off” the 25 percent border tax threat on imports from Europe. America’s ambassador to Germany, Richard Grenell, has already met with executives from the German automakers and he’s not taking their proposal directly to administration officials. Another area of concern for these automakers are their US-based production plants and the thousands of people they employ. Trump has already ordered a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum.

The EU has responded in kind with a 25 percent import duty on a variety of products beginning this week. The German automakers very clearly do not want to be hurt by this trade war, hence their willingness to make such concessions. After all, new Audis, BMWs, and Mercedes are already expensive enough; adding a huge tax to the final price tag will scare away too many buyers.